×

Ditching Trump is not enough. Here's what CEOs need to do now

  • President Trump's response to Charlottesville prompted CEOs to speak out, shedding fear of reprisals.
  • Stepping away from the advisory councils was a first step.
  • But business leaders must go further to help society recommit to fundamental American values.
Flanked by Blackstone CEO Stephen Schwarzman (L) and General Motors CEO Mary Barra (R), U.S. President Donald Trump holds a strategy and policy forum with chief executives of major U.S. companies at the White House in Washington February 3, 2017.
Kevin Lamarque | Reuters
Flanked by Blackstone CEO Stephen Schwarzman (L) and General Motors CEO Mary Barra (R), U.S. President Donald Trump holds a strategy and policy forum with chief executives of major U.S. companies at the White House in Washington February 3, 2017.

In times of crisis, we seek moral leadership from the presidency. We can recall President Clinton calling for justice not vengeance after Oklahoma City, or President Bush visiting a mosque in the wake of 9/11. We remember President Obama's speech on the power of grace after Charleston.

For some business leaders, President Trump's offensive reaction to the gut-wrenching incident in Charlottesville, VA marked a breaking point from any association with this administration.

They joined Trump's advisory councils to make their voice heard on policy and regulation, assuming he would be a rational actor. But normalcy never arrived, legislation was never produced, and the council meetings became nothing but a photo op used to bolster the perception of the president's legitimacy.

At the outset of the administration, CEOs wondered what would happen if President Trump used social media against them. Would their stock tank? Would their boards punish them? But by continually bending the truth and launching ad hominem attacks, Trump has damaged his credibility and alienated so much of the American public that it's begun to dig into his base. There's little bite left because there's been so much bark. And the reputational risk of being associated with this president is now greater than speaking out against him.

There is a growing leadership vacuum for businesses to step up where the president has been absent. We shouldn't undermine the significance of speaking out against policies like the Muslim ban or the events at Charlottesville, but companies should follow their words with clear actions.

First, evaluate potential immediate impacts, like Airbnb's decision to ban white supremacists from its platform or GoDaddy's to shut down The Daily Stormer. But this is an opportunity to think on a higher plane - if you've got a presence in communities across America, what are you doing to bring them together? What are you doing to rebuild American credibility on the global stage?

Major brands don't just sell products – they define our culture. Recent events are a clarion call to dedicate resources and attention to help us rebuild the fabric of our society. American leadership was never concentrated in just one person.

Businesses that got ahead of legislation when it comes to promoting diversity and inclusion have not been punished – in fact, they've been validated by their employees and customers. A recent study focused on companies that spoke out against efforts that would have codified LGBT discrimination into law found that C.E.O. activism can sway public opinion and have a positive impact on sales.

Moreover, a company's ability to succeed is inextricably linked to their ability to recruit the best talent. Why alienate a candidate of any background from that pool? A company that promotes a strong and inclusive culture is a lot more enticing than one that offers free lunch.

In an era of distrust in big institutions, having a clear set of values builds brand loyalty and stands out from a pervasive perception, especially among millennials, that corporations are soulless. And even for C.E.O.s who want to avoid politics as much as possible, values need not be partisan – they can be unifying.

We also know that reputation has a direct link to business performance. The strength of the product may be a consumer's primary concern, but brand damage will cause them to hesitate. Lululemon's sales collapsed after the CEO insulted its customer base. Target's profits were cut in half after a poor response to a data breach. Conversely, companies that have bolstered their reputations by making substantive changes to their business have seen a pickup in sales.

It is a great irony that C.E.O.s have begun to flee the man who billed himself as the CEO president. Speaking up against hate and divisiveness and stepping back from the advisory councils was a first step. But business leaders should go further at this precarious time for our country – use your bully pulpit to help our society recommit to fundamental American values.

Commentary by Ben LaBolt, a partner at Bully Pulpit Interactive, where he advises Fortune 500 companies and emerging brands on strategic communications and reputation management. He served as a communications strategist on Capitol Hill and in the White House, most notably as a longtime spokesman for President Obama. Follow him on Twitter @BenLaBolt.

For the latest commentary on markets in the U.S. and around the world, follow @CNBCopinion on Twitter.